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May 2002

Be careful of what you wish for

NewsWire Editorial

One afternoon this month a part of HP’s history ended. Out on the New York Stock Exchange, the symbol which HP has used for 40 years is being retired. HWP became another relic of a bygone era at HP. In this month’s first full week the company began to offer its shares under the symbol HPQ, reflecting its success at merging with Compaq.

Whether the merger brings success to both you and your computer vendor remains to be proven by HP’s top management. The merger mission will be executed — an apt verb, considering what surfaces next in the drama — by hundreds of employees in charge of change. While the merger has been a topic of ripe debate among the 3000 community, the impact of the collision between HP and Compaq product lines won’t be felt inside the 3000 marketplace — a place where HP has already cancelled its product.

In the same way that cancellation makes HP’s fate less relevant to many of you, execution of this merger will end things before anything substantial begins. Product lines and people will be the first things to exit HP. As this bloodletting gets underway, customers and business partners using HP 3000s might do well to recall the proverb atop this column. No matter how noble its motivation, any wish can lose its luster in the hard light of execution: mergers, migrations, or a boy’s dream of playing center field in his hometown.

That boy would be Ken Griffey Jr., known to many baseball fans simply as Junior Griffey. At age 29 he was voted one of the 50 best players ever to play the game of baseball. His boyhood dream, however, has become something to be careful of. Maybe it’s like that HP call to migration, trumpeted toward customers so legendary for their product loyalty. This summer’s plays may tell the tale for both Junior and HP’s wishes in your marketplace.

For Junior, his wish was to play for his dad’s team. We’re not talking about Junior playing for a baseball club that Ken Griffey Sr. rooted for from his armchair. We’re talking about the Cincinnati Reds, a club where Griffey Sr. starred in the 1970s. In center field. While his boy Junior played in the team’s dugout, watching his dad.

Junior was blessed with even better skills than his father, talent the boy polished with a shining smile in Seattle for many years. Finally, when his contract was up, he got to pursue his wish. He signed with Cincinnati, to the delight of his dad, then a coach for the Reds, and the adoration of fans in his old hometown. The perennial All-Star became the heart of hope in a small market of baseball. Sportswriters predicted, with the certainty of stock analysts, that the Reds would rise on the tide of Junior’s wish come true.

Three seasons later, Junior might wonder if he should have wished more carefully. He had some bad luck. He spent almost a full season’s worth of games on the injured list, and the rest of the team’s fortunes declined even when he played. The smiling young man of Seattle became sullen, pressured to provide the Reds leadership to match his salary and reputation.

Junior left Seattle and came home to Cincinnati for a reason as noble as any: to be with his children during their school year. He may have remembered seeing less of his dad growing up, while the Reds were away from home. Moving to a little market to be with your kids seems like a no-brainer. Maybe it’s like adopting commodity practices to maximize computing profits, as HP is now set to do. Profit is a noble corporate motive, of course.

But the family approach hasn’t been enough for the Reds fans buying tickets. Junior was back, but where was the championship? Three years after Junior’s wish came true in Cincinnati, three other outfielders started this season while the all-star went onto the injured list again. The Reds now lead their league in wins. His old team flourished without him, too. And in the final insult to his wish, Junior saw a hometown TV station poll viewers on who should be benched — the three starters, or him. Three fans out of every four who voted would put Junior on the bench.

Could anybody have seen this coming? These days, the CEOs say they have limited visibility, and that certainly describes the outlook in today’s HP 3000 community. What the future will bring is something few can guarantee. Nobody could foresee Junior becoming irrelevant to a Reds fan in his hometown. Playing there was his fondest wish, much like HP wished for a merger, and the HP 3000 division leaders at CSY wish their customers would migrate off the computer.

Visibility for HP and CSY is considerably better than Junior’s, however. It doesn’t take much of a crystal ball to see that 15,000 firings and killing off product lines will offer HP competitors some easy pickings this year. HP promises they won’t lose more than 5 percent in revenue post-merger. If they stay healthy and are very lucky, that might turn out to be true.

We can see places in the 3000 community where some of that revenue loss will occur. CSY is wishing for migration, but so are its competitors. The migration wish is being interpreted as a replacement wish in most companies who can’t stick with the HP 3000.

Replacement puts HP at greatest risk of losing a customer, but what can you expect a 3000 manager to do? You can’t take the majority of a customer base that’s happy with simple, bundled computing and make it an avid fan of complex, open systems without expecting some computing habits to hang on.

HP 3000 sites like simple IT, and managers in their 40s and 50s won’t be anxious to roll up their sleeves and become neophytes once more. People like to be all-stars, especially if they’ve got a reputation in their companies of knowing the answer to the users’ questions, or keeping applications working all the time.

After some search, we are starting to find HP 3000 customers who wished for this migration march. Our interviews, however, often turn up a different kind of customer who’s making this wish. These IT professionals love a challenge, and don’t sweat at night worrying about problems or downtime. Many came from a Unix background, and so picked up the 3000 along with new responsibility for routers or their phone system. The computer’s differences stood out to them, distinguishing marks looking more like tattoos than beauty marks.

Some of these wishful customers will migrate, and there will probably be enough of them to keep plenty of partners busy over the next five years. But many more will be replacing their HP 3000s wholesale, and HP doesn’t have more than a even chance of winning that business. If IBM can put together a compelling offer, even those chances might be optimistic. Big Blue never gave up on the idea of bundled, proprietary IT solutions while it embraced open systems. Customers replacing a proprietary HP solution they remember as trouble-free could well look for the same kind of solution — leaving HP sitting on the bench, since it has no comparable product offering after next October.

It’s this replacement regimen that might yield more of an HP revenue loss from your corner of the IT world than merger fanatics wish for. Replacement throws everything out except business logic, including existing vendors. Like Junior Griffey’s dream, driving HP 3000 customers toward more open systems is a wish HP should be careful of — since the customers’ new choices could eliminate HP’s support revenues, a far steadier stream of cash than the sales of new 3000s.

Why would HP want to eliminate any source of support cash, in an era when sales growth has been so hard to come by? You might as well ask why an All-Star wanted to take a pay cut and play for a team short of championship prospects. The times might be a-changing, but taking a look at who stands to benefit from the change seems prudent, now that HP wants everyone to plan for a new future. Junior Griffey wanted to be closer to his family, something he wished for at the cost of the hopes of his new fans. HP will get to bench a lot of products and people with their merger complete.

Getting fewer choices from the merged HP, products which are less unique, is somebody’s wish come true. Be careful before you decide that someone is you, the customer. Be sure you wish for challenges without fear, and get help for what you don’t know — or take a hard look at riding the bench.

— Ron Seybold  

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